Worst not yet over for Perth property market

Stock image.
Stock image.

THE worst is not quite over for the Perth property market with the NAB’s Residential Property Survey (Q4 2018) forecasting falling prices in 2019.

A 0.2 per cent house price decline is predicted this year, which is an improvement on the 4.3 per cent decrease in 2018.

NAB group chief economist Alan Oster said 2018 continued an ongoing adjustment with the large run up in supply during the mining boom still weighing on the market.

Stability is expected in 2020 with no growth or decline forecast.

Unit prices are expected to take longer to improve with a decrease of 2.4 per cent forecast for 2019, and a 1.8 per cent decline the following year.

While overall declines are forecast some areas will see growth, with Armadale and Scarborough tipped to enjoy above average growth in the next 12 months.

Across the nation, Melbourne and Sydney are expected to be the worst performers in 2019, with house price falls of 7 per cent and 5.6 per cent forecast respectively.

Hobart and Adelaide should see price growth.

The outlook is more positive for the WA rental market with the forecast for rent price growth in the next year increased to 1.9 per cent from 0.8 per cent.

Longer-term, Mr Oster said the strongest rental growth was predicted for WA – 3.1 per cent, an improvement from the 2.0 per cent previously forecast.

Tightening credit was identified as the single biggest constraint on housing development and the established market in Australia with concern over rising interest rates moderate.

Mr Oster expects the RBA to show patience, requiring firm evidence on the true pace of inflation, before acting on rates.

“We still expect the next move on the cash rate to be up, but now expect the next move to occur in the second half of 2020,” he said.